EXEMPTING BROWNFIELDS REDEVELOPMENT ACTIVITIES FROM UNRELATED BUSINESS INCOME TAX

WHEREAS, the Nation's Mayors have documented the tremendous economic and social impact
that the estimated half a million brownfield properties have had on their communities and have long
recognized the importance of redeveloping brownfield properties as a catalyst for economic
development, job creation, and neighborhood improvement; and

WHEREAS, the Small Business Liability and Brownfields Redevelopment Act of 2001 provides
monies to do cleanup and assessments of brownfields sites and liability relief for innocent
developers and municipalities; and

WHEREAS, the Conference Mayors recognizes that federal funding will not be enough to deal
with the tremendous number of brownfield sites that exist in this country;

WHEREAS, the Conference of Mayors recognizes that additional resources, tools and programs
are needed to encourage additional funding for economic and community redevelopment including
the need to attract private sector investment; and

WHEREAS, currently, tax-exempt investors such as endowments, foundations, and pension funds
can incur Unrelated Business Income Tax (UBIT) by investing in brownfield investment funds; and

WHEREAS, Congress originally adopted UBIT to level the playing field in situations where tax-exempt organizations entered marketplaces occupied traditionally by taxable entities but which had
the unintended effect of dissuading the largest private capital sources from investing in brownfield
sites across America; and

WHEREAS, because these investors hold roughly 60 percent of the institutional capital in this
country, the unintended consequence of UBIT has been to deprive brownfield sites of much-needed capital for remediation and redevelopment activities; and

WHEREAS, exempting these entities from UBIT will cost little to administer and have a de-minimus negative impact on tax revenues but should have a significant positive revenue impact for
future years

NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors
hereby urges Congress to pass legislation that would exempt brownfield investments from
incurring Unrelated Business Income Tax and thereby encouraging additional private sector
investment for brownfield properties.